SWOT stands for Strengths, Weaknesses, Opportunities, and Threats, and the purpose of a SWOT analysis is to create a synthesized view of your current state.
And a SWOT analysis is a great way to capture and frame up what your current state is.
And great planning, whether a strategic planning, marketing planning, operational planning,you name it, great planning starts with an understanding of where you are today, confronting the brutal facts, as Jim Collins says, so you can build a future.
Strengths, we build on our strengths.
Weaknesses, we shore them up.
Threats, which we monitor.
We’re looking for a holistic view of your organization, and it’s important to be really clear about what we can impact and directly influence, internal, and what we can influence
but not directly impact, external.
Taking it to the next level is bringing data into your SWOT analysis.
You cannot have a great SWOT analysis without understanding what your customers are saying about what you’re doing well and what you’re not doing well. And last, but certainly not least, pull in some of your key performance indicators or very simply your current performance over the last year, three years, five years, whatever makes the most sense.
I like to think about external data kind of in concentric circles, starting from the outside. So check out your industry association for reports on potential opportunities, threats, and trends in your area.
Coming in a little bit closer, your market.The market comes in two flavors, your geographic market that you serve or your target markets that you’re serving.Data sources include your economic development organization for current market information and then Census Bureau for target market-type information.
Understand what your top three competitors are doing.
Super important to have a holistic view of your external perspective. Same thing, if you’re pressed for time, make sure you get industry information and make sure you bring in competitive information into your SWOT.
Group them up, sub-bullet point them, that type of thing, such that you have a pretty well-rounded SWOT It’s nice for it to fit on one page.Like I said, you wanna be able to see your current state, one page, 11 point font, not 7, so dial it down.There’s always more Weaknesses than there are Threats, so take that as a rule of thumb.It doesn’t have to be perfect Here’s tip number two.Do not confuse Weaknesses and Opportunities, and this happens all the time.And when that happens, your SWOT falls apart.
So it needs to live in this quadrant, and if you have a lot of things like that, you might reconsider renaming this quadrant Areas of Improvement.
And if you do that, then just make sure that all the bullet points in this area are phrased that same way, improve communications.If you wanna keep it as Weakness, change it to lack of communication and then you have a statement that sounds like a weakness.So why is this important? When you process out your SWOT — and we have a whole video on that, so go check that out but really quickly, when you process out your SWOT, you’re gonna wanna start with Opportunities,and this is your growth area.Planning is about growth.
If you have stuff in here that isn’t about growth, the SWOT doesn’t work. So Opportunities are growth goals.That’s what you do with those.Threats, most of the time, you don’t turn into goals.
You merely watch them, maybe an initiative or two, but most of the time you’re watching them.Under Weaknesses, these are gonna turn into your operational and people goals and initiatives.
And last, but certainly not least, your Strengths are a source of your competitive advantage or a starting point to identify them We have a whole video on that, so check that out to identify your competitive advantages.